Correlation Between IShares Canadian and Trench Metals
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Trench Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining IShares Canadian and Trench Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian HYBrid and Trench Metals Corp, you can compare the effects of market volatilities on IShares Canadian and Trench Metals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IShares Canadian with a short position of Trench Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Trench Metals.
Diversification Opportunities for IShares Canadian and Trench Metals
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Trench is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Trench Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trench Metals Corp and IShares Canadian is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on iShares Canadian HYBrid are associated (or correlated) with Trench Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trench Metals Corp has no effect on the direction of IShares Canadian i.e., IShares Canadian and Trench Metals go up and down completely randomly.
Pair Corralation between IShares Canadian and Trench Metals
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.05 times more return on investment than Trench Metals. However, iShares Canadian HYBrid is 20.3 times less risky than Trench Metals. It trades about 0.07 of its potential returns per unit of risk. Trench Metals Corp is currently generating about -0.01 per unit of risk. If you would invest 1,716 in iShares Canadian HYBrid on August 29, 2024 and sell it today you would earn a total of 248.00 from holding iShares Canadian HYBrid or generate 14.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Trench Metals Corp
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Trench Metals Corp |
IShares Canadian and Trench Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Trench Metals
The main advantage of trading using opposite IShares Canadian and Trench Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Trench Metals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Trench Metals will offset losses from the drop in Trench Metals' long position.| IShares Canadian vs. iShares IG Corporate | IShares Canadian vs. iShares High Yield | IShares Canadian vs. iShares Floating Rate | IShares Canadian vs. iShares JP Morgan |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |